Fundamentals of Statistics (5th Edition)
5th Edition
ISBN: 9780134508306
Author: Michael Sullivan III
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 12.3, Problem 19AYU
CEO Performance (Refer to Problem 31 in Section 4.1) The following data represent the total compensation for 12 randomly selected chief executive officers (CEOs) and the company’s stock performance in 2013.
| Company | Compensation (millions of dollars) | Stock Return (%) |
| Navistar International | 14.53 | 75.43 |
| Aviv REIT | 4.09 | 64.01 |
| Groupon | 7.11 | 142.07 |
| Inland Real Estate | 1.05 | 32.72 |
| Equity Lifestyles Properties | 1.97 | 10.64 |
| Tootsie Roll Industries | 3.76 | 30.66 |
| Catamaran | 12.06 | 0.77 |
| Packaging Corp of America | 7.62 | 69.39 |
| Brunswick | 8.47 | 58.69 |
| LKQ | 4.04 | 55.93 |
| Abbott Laboratories | 20.87 | 24.28 |
| TreeHouse Foods | 6.63 | 32.21 |
Source: Data from Chicago Tribune, June 1, 2014
- a. Treating compensation as the explanatory variable, x, determine the estimates of β0 and β1.
- b. Assuming the residuals are
normally distributed , test whether a linear relation exists between compensation and stock return at the α = 0.05 level of significance. - c. Assuming the residuals are normally distributed, construct a 95% confidence interval for the slope of the true least-squares regression line.
- d. Based on your results to parts (b) and (c), would you recommend using the least-squares regression line to predict the stock return of a company based on the CEO’s compensation? Why? What would be a good estimate of the stock return based on the data in the table?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Q5.
Walmart predicted the following end-of-year earnings from 2003 - 2012 in billions of
dollars (9.5, 9.8, 10.2, 10.7, 10.5, 11.0, 12.1, 14.7, 16.3, 18.7). Their actual end-of-
year earnings for the same years are as follows: 9.1, 9.2, 10.6, 10.3, 9.9, 10.4, 11.6,
11.8, 13.1, 22.7). In testing the claim that the mean predicted value is the same as
the mean actual value, which p-value is correct?
0.228
0.456
0.779
0.05
4
A sample of 20 financial analysts was asked to provide forecasts of earnings per share of a corporation for next year. The results are summarized in the following table:Forecast ($ per share) Number of Analysts$9.95 to under $10.45 2$10.45 to under $10.95 8$10.95 to under $11.45 6$11.45 to under $11.95 3$11.95 to under $12.45 1a. Estimate the sample mean forecast.b. Estimate the sample standard deviation.
Chapter 12 Solutions
Fundamentals of Statistics (5th Edition)
Ch. 12.1 - True or False: The shape of the chi-square...Ch. 12.1 - A _____ test is an inferential procedure used to...Ch. 12.1 - Suppose there are n independent trials of an...Ch. 12.1 - What are the two requirements that must be...Ch. 12.1 - In Problems 5 and 6, determine the expected counts...Ch. 12.1 - In Problems 5 and 6, determine the expected counts...Ch. 12.1 - Prob. 7AYUCh. 12.1 - Prob. 8AYUCh. 12.1 - In Problems 710, determine (a) the 2 test...Ch. 12.1 - In Problems 710, determine (a) the 2 test...
Ch. 12.1 - Applying the Concepts 11. NW Plain MMs According...Ch. 12.1 - Peanut MMs According to the manufacturer of MMs,...Ch. 12.1 - Prob. 13AYUCh. 12.1 - Prob. 14AYUCh. 12.1 - Always Wear a Helmet The National Highway Traffic...Ch. 12.1 - Religion in Congress Is the religious make-up of...Ch. 12.1 - Does It Matter Where I Sit? Does the location of...Ch. 12.1 - Racial Profiling On January 1, 2004, it became...Ch. 12.1 - Prob. 19AYUCh. 12.1 - Prob. 20AYUCh. 12.1 - Prob. 21AYUCh. 12.1 - Is the Die Loaded? A player in a craps game...Ch. 12.1 - Grade Distributions At Joliet Junior College, the...Ch. 12.1 - Population Shift An urban economist wonders if the...Ch. 12.1 - Prob. 25AYUCh. 12.1 - Living Alone? In 2000, 25.8% of Americans 15 years...Ch. 12.1 - Putting It Together: The V-2 Rocket in London In...Ch. 12.1 - Putting It Together: Weldons Dice On February 2,...Ch. 12.1 - Buying a New Car How much does the typical person...Ch. 12.1 - Why is goodness of fit a good choice for the title...Ch. 12.1 - Explain why chi-square goodness-of-fit tests are...Ch. 12.1 - Prob. 32AYUCh. 12.2 - True or False: The expected frequencies in a...Ch. 12.2 - In a chi-square test for ____ of proportions, we...Ch. 12.2 - The following table contains observed values and...Ch. 12.2 - The table in the next column contains observed...Ch. 12.2 - Prob. 5AYUCh. 12.2 - Prob. 6AYUCh. 12.2 - NW Family Structure and Sexual Activity A...Ch. 12.2 - Prenatal Care An obstetrician wants to learn...Ch. 12.2 - Health and Happiness Are health and happiness...Ch. 12.2 - Health and Education Does amount of education play...Ch. 12.2 - Social Well-Being and Obesity The Gallup...Ch. 12.2 - Profile of Smokers The following data represent...Ch. 12.2 - Efficacy of e-Cigs Do electronic cigarettes assist...Ch. 12.2 - Celebrex Celebrex, a drug manufactured by Pfizer,...Ch. 12.2 - NW Whats in a Word? In a recent survey conducted...Ch. 12.2 - Whats in a Word? Part II In a recent survey...Ch. 12.2 - Dropping a Course A survey was conducted at a...Ch. 12.2 - Prob. 18AYUCh. 12.2 - Prob. 19AYUCh. 12.2 - Prob. 20AYUCh. 12.2 - Putting It Together: Women, Aspirin, and Heart...Ch. 12.2 - Homeruns Go to...Ch. 12.2 - Explain the differences between the chi-square...Ch. 12.2 - Why does the test for homogeneity follow the same...Ch. 12.3 - Suppose a least-squares regression line is given...Ch. 12.3 - Prob. 2AYUCh. 12.3 - Prob. 3AYUCh. 12.3 - Prob. 4AYUCh. 12.3 - Prob. 5AYUCh. 12.3 - Prob. 6AYUCh. 12.3 - Prob. 7AYUCh. 12.3 - Prob. 8AYUCh. 12.3 - Prob. 9AYUCh. 12.3 - Prob. 10AYUCh. 12.3 - An Unhealthy Commute The following data represent...Ch. 12.3 - Credit Scores An economist wants to determine the...Ch. 12.3 - Height versus Head Circumference A pediatrician...Ch. 12.3 - Hurricanes The data in the next column represent...Ch. 12.3 - Concrete As concrete cures, it gains strength. The...Ch. 12.3 - Tar and Nicotine Every year the Federal Trade...Ch. 12.3 - Invest in Education Go to...Ch. 12.3 - American Black Bears In 1969, Dr. Michael R....Ch. 12.3 - CEO Performance (Refer to Problem 31 in Section...Ch. 12.3 - Bear Markets (Refer to Problem 32. Section 4.1) A...Ch. 12.3 - Age versus HDL Cholesterol A doctor wanted to...Ch. 12.3 - Prob. 22AYUCh. 12.3 - Influential Observations Zillow.com is a site that...Ch. 12.3 - Why is it important to perform graphical as well...Ch. 12.3 - Prob. 25AYUCh. 12.3 - Why is it desirable to have the explanatory...Ch. 12.4 - Intervals constructed about the predicted value of...Ch. 12.4 - Prob. 2AYUCh. 12.4 - Prob. 3AYUCh. 12.4 - Using the sample data from Problem 6 in Section...Ch. 12.4 - Prob. 5AYUCh. 12.4 - Prob. 6AYUCh. 12.4 - Prob. 7AYUCh. 12.4 - Prob. 8AYUCh. 12.4 - Prob. 9AYUCh. 12.4 - Prob. 10AYUCh. 12.4 - Prob. 11AYUCh. 12.4 - Tar and Nicotine Use the results of Problem 16 in...Ch. 12.4 - Prob. 13AYUCh. 12.4 - Prob. 14AYUCh. 12.4 - CEO Performance Use the results of Problem 19 from...Ch. 12.4 - Prob. 16AYUCh. 12.4 - Prob. 17AYUCh. 12 - Roulette Wheel A pit boss suspects that a roulette...Ch. 12 - Prob. 2RECh. 12 - Titanic With 20% of men, 74% of women, and 52% of...Ch. 12 - Prob. 4RECh. 12 - Prob. 5RECh. 12 - Prob. 6RECh. 12 - Seat Choice and GPA A biology professor wants to...Ch. 12 - Apartments The following data represent the square...Ch. 12 - Calories versus Sugar The following data represent...Ch. 12 - A pit boss is concerned that a pair of dice being...Ch. 12 - Prob. 2CTCh. 12 - The Harris Poll asked a random sample of adult...Ch. 12 - Prob. 4CTCh. 12 - Prob. 5CTCh. 12 - Prob. 6CTCh. 12 - Crickets make a chirping noise by sliding their...Ch. 12 - The following data represent the height (inches)...Ch. 12 - A researcher believes that as age increases, the...Ch. 12 - CASE STUDY Feeling Lucky? Well, Are You? In fiscal...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.Similar questions
- 6. The Computer Security Institute (CSI) conducts an annual survey of computer crime at U.S. businesses. CSI sends survey questionnaires to computer security personnel at all U.S. corporations and government agencies. The 2010 CSI survey was sent and 351 organizations responded. One of the survey questions asked respondents to indicate the percentage of monetary losses attributable to malicious actions by individuals within the organization (i.e., malicious insider actions). The following table summarizes the data for the 144 firms who experienced some monetary loss due to malicious insider actions. Lower Bound 0 10 20 30 40 50 60 70 80 90 Sum Upper Bound 10 20 30 40 50 60 70 80 90 100 Cell Midpoint 5 15 25 35 45 55 65 75 85 95 Frequency 43 55 16 3 2 1 9 4 5 6 144 a. Find the mean percentage loss for the sample of firms who reported some loss. b. Find the median, upper and lower quartiles. c. Draw the box plot. d. Would you describe this distribution as symmetric or skewed? Justify. e.…arrow_forwardThe selling prices of mutual funds change daily. In order to study these changes, a sample of mutual funds was examined and the daily changes in price are listed below. (Round answers to 3 decimal places) 0.32, -0.17, 0.26, -0.03, -0.01, 0.18, 0.33, 0.28, 0.02, -0.29, -0.08, 0.12, 0.07, 0.03, 0.28 a) Using a calculator find Q1, Q3, median and IQR b) Determine the lower and upper fences. (Show work) c) Identify the outliers (if any) in this setarrow_forwardA website recently reported that salaries of Chief Finance Officers (CFOs) ranged from $127,735 to $209,981 (before bonuses). Suppose the data below represent a sample of the annual salaries for 24 CFOs in thousands of dollars. Complete parts a through c. 203.4 186.4 184.9 169.2 194.8 176.9 146.8 192.8 202.4 149.3 179.1 185.6 184.4 134.4 201.8 189.6 176.5 151.3 204.6 187.1 206.3 162.6 208.5 142.6 a. Using 9 classes, construct a cumulative frequency distribution. (Use the minimum class width, rounded up to the nearest integer. Start the first class at 134.) Complete the cumulative frequency distribution below. (Simplify your answers.) CFO Salary (thousands of Cumulative Frequency dollars) and underarrow_forward
- The following table shows a data set containing information for 45 mutual funds that are part of the Morningstar Funds 500 for 2008. . The data set includes the following five variables: Use Excel to answer the following question: a. Prepare a crosstabulation of the data on Fund Type (row variable) and the average annual return over the past 5 years (column variable). Use classes of 0–10, 10–20, 20–30, 30–40, 40–50, and 50–60 for the 5-Year Average Return (%) (Class width is 10). B. Construct frequency distributions for Fund Type and 5-Year Average Return (%) respectively. Based on the frequency distributions of the two variables, which of the following answers is wrong? Group of answer choices Out of the 45 mutual funds, there are 2 funds with 5-year average return of 30 - 40 (%). Out of the 45 mutual funds, there are 28 funds with 5-year average return of 10 - 20 (%). Out of the 45 mutual funds, there are 28 DE type of funds. Out of the 45 mutual funds, there are 10…arrow_forwardI just need help with (a) (b) (e)arrow_forward19) Calculate the arithmetic average for the following returns: Year 2017 2018 2019 2020 Return 12.03% -8.24% 1.34% 4.55% Group of answer choices 2.4% 2.2% 3.1% 3.4%arrow_forward
- 1arrow_forward3. A Bloomberg Businessweek North American subscriber study collected data from a sample of 2861 sub-scribers. Fifty- nine percent of the respondents indicated an annual income of $ 75,000 or more, and 50% reported having an American Express credit card. a. What is the population of interest in this study? b. Is annual income a categorical or quantitative variable? c. Is ownership of an American Express card a categorical or quantitative variable? d. Does this study involve cross- sectional or time series data? e. Describe any statistical inferences Bloomberg Businessweek might make on the basis of the survey. 4. Table 1.8 shows a data set containing information for 25 of the shadow stocks tracked by the American Association of Individual Investors. Shadow stocks are common stocks of smaller companies that are not closely followed by Wall Street analysts. The data set is also on the website that accompanies the text in the file named Shadow02. a. How many variables are in the data set?…arrow_forwardOfficial unemployment rates for the U.S. population are reportedon a monthly basis by the Bureau of Labor Statistics.For the period October, 2011, through January, 2012, theofficial unemployment rates were 8.9% (Oct.), 8.7% (Nov.),8.5% (Dec.), and 8.3% (Jan.). (Source: U.S. Bureau of LaborStatistics, www.bls.gov.) If the unemployment rateswere to continue to decrease following a linear model,(a) predict the unemployment rate on January, 2013.(b) predict when the United States would reach a zero unemploymentrate.arrow_forward
- Consider the following data from a stock table on the company "Apple Inc." Name Apple Inc. Symbol APPL Close $148.96 Day Range $146.76−$148.98 52-week Range $89.47−$148.98 Volume 27,327,725 P/E 17.88 Dividend $2.52 EPS $? Calculate the earnings per share.arrow_forward6arrow_forwardShow your work please!arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw Hill
Glencoe Algebra 1, Student Edition, 9780079039897...
Algebra
ISBN:9780079039897
Author:Carter
Publisher:McGraw Hill
Hypothesis Testing using Confidence Interval Approach; Author: BUM2413 Applied Statistics UMP;https://www.youtube.com/watch?v=Hq1l3e9pLyY;License: Standard YouTube License, CC-BY
Hypothesis Testing - Difference of Two Means - Student's -Distribution & Normal Distribution; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=UcZwyzwWU7o;License: Standard Youtube License